Vietnamese Small and Medium Size Enterprises (“SME’s”)
06 Mar 2017
The number of new SME’s continues to grow at a healthy rate with approximately 14,500 new enterprises established in the first 2 months of 2017, a year on year growth of 3.9%. In this period the registered capital of these newly established firms was US$ 6.7 billion an increase of 35% against the same period as last year.
With over 600,000 registered SME’s and growing at over 100,000 per annum SME’s are an important sector of the economy. However the number of firms ceasing operations or closing has not been insignificant but over the last 12-18 months the number resuming operations has been increasing.
In a recent survey by CPA Australia the institute reported that 89% of small businesses grew in 2016 and 94% expect to grow in the next 12 months, confirming the optimism of Vietnamese and Vietnamese business. 86% also expect the Vietnamese economy to grow in the next 12 months. This is supported by the fact that 54% of those interviewed increased the number of employees in the last 12 months with 71% expecting to increase the number of employees in the next 12 months.
These strong expectations put Vietnam second in the 8 countries surveyed by CPA Australia with Indonesia first and Vietnam followed by Malaysia, China, Hong Kong, New Zealand and Australia. Alex Malley Chief Executive of CPA Australia said “Small businesses in Vietnam are outward facing, confident and optimistic.
Also over the last 12 months we have seen the Government more focused on facilitating the growth of SME’s and creating more of an ecosystem for startups, particularly in the IT and digital sectors. It was interesting to learn from the CPA Australia survey that 86% of the survey respondents earned revenue from on line sales and 92% use social media for business purposes.
SME’s in Vietnam contribute more than 40% 0f GDP and account for over 50% of employment.